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Irresponsible or prudent?

Nick Robinson | 14:45 UK time, Saturday, 15 November 2008

WASHINGTON: Labour say he's being irresponsible. The Tories that he's showing the courage to be prudent.

Either way George Osborne must have known he was risking huge controversy by warning of a possible "collapse of sterling" whilst the prime minister is abroad at the Global Economic Summit.

The shadow chancellor's thinking is this. A British fiscal stimulus package will be too small to make any real difference if it's affordable, or unaffordable if it's big enough to make a difference.

Why? Because unlike China or Australia we do not have budget surpluses to spend and unlike Germany our budget deficit is not at a level where it's safe to borrow more. Osborne points to warnings by the Head of the European Central Bank amongst others that only those countries with fiscal room for manoeuvre should go for a stimulus.

What's more he has heard from former chancellors Howe, Lawson, Lamont and Clarke and the former Permanent Secretary of the Treasury, Lord Burns about how they tried in vain to stimulate the economy in the recession of the early 1990s.

What, though, of the backing of the governor of the Bank of England? Osborne points to the two caveats that Mervyn King added - that any stimulus be temporary and be accompanied by government setting out a clear path back to prudent levels of borrowing.

What the shadow chancellor was warning of today was the reaction of the markets if they lose faith in the British government's financial responsibility.

What's his evidence? He points to the 25% drop in the pound against the dollar and the fact that markets are demanding double the risk premium for British government debt as they are now for German government debt.

Politically, Team Brown believe the Tories have made a huge mistake and claim he's talking the economy down as the prime minister's trying to boost it.

In policy terms some are more candid, admitting that they are dealing with a balance of risks and arguing that the risk of doing nothing in the face of a serious recession is greater than the risk of being punished by the markets.

UPDATE: Speaking in the House of Lords earlier this month (3 November 2008) Lord Burns warned of Sterling problems, though in a rather less graphic way than George Osborne.

He said: "Each of the three serious downturns that I have observed at close quarters --1974-75, 1980-81 and 1991-92 -- have had two striking characteristics: namely, the emergence of a budget deficit that increased to a point where the restoration of structural balance was a long and painful process; and at some point a depreciation of Sterling that moved from just about being welcome to becoming very painful. Let us hope that we are not forced to repeat those experiences."


Page 1 of 5

  • Comment number 1.

    Osborne is telling it how it is. Unlike Brown, who is prepared to say or do anything to save his own neck.

  • Comment number 2.

    I think you have to be something of a financial expert to have any understanding of any of this. I would happily go along with what those with actual experience (the majority that is) have to say. The trouble is these are very unusual circumstances. I don't believe we have that much room for manoevre due to our particular circumstances and we have to be very careful not to burden future generations with massive debts laid down today.

  • Comment number 3.

    Brown is now accusing Osborne of playing party politics, but it seems to me that in so doing, he is using the same wheeze he tried against Cameron in the Commons on Wednesday. That backfired too.

    Osborne is pointing out what everybody can see. He hasn't pushed the pound down to where it is, Brown's policies have done that because the markets can see the terrible state we are currently in.

    You have to ask yourself who is more desperate; the Tories who are well ahead in the polls, or Brown, who is trailing badly and even looked likely to be replaced as Labour leader until a few weeks ago.

  • Comment number 4.

    Since I have a go when I think you are being niave, I have to be honest when I think you have it right.

    You do here.

    The media have missed this so far.
    They clearly overestimated Brown's love in with other leaders. In fact some are clearly going to be sceptical of his so called status bearing in mind their budgets are in better shape than than ours.
    His bigging up of himself for domestic comsumption has consequences elsewhere.

    The current conference is exposing weaknesses in the position of Brown. What if he needs a big package for himself but has to do it unilaterally?

    People will see through the 'best placed' stuff and the 'world leader' stuff.

    He has raised expectations to high in a number of respects and this is now becoming clear.

    Some papers have reported there has been a delay in Darling's statement because of a dispute as to the size and risks of borrowing between the Treasury and Brown.
    Osborne has concerns about how that panned out.

  • Comment number 5.

    Brown attacks the messenger, he has nothing to say about the message...

    George is clearly right in what he says, and right to say it. He also clearly has the support of the other repected financial bods in the conservative party - should stop some of the nonsence being spoken about him being in a weak position.

    Talking of his position - what is the latest on Mandleson - have you asked him about the news that he did discuss eu tariffs with Oleg?

  • Comment number 6.

    You are actualy analysing this rather than regurgitating Labour spin (or Conservative spin. Or Lib Dem spin).

    Well done. Keep it up.

    Facts is : sterling has fallen 25% against the US $ in 3 months.. Thanks King and Brown.
    Osborne warns: and Labour attempt to blame him for weakening sterling.!

    If Darling loses to Brown , we are going to pay a high price... tax pay.

    And I suspect no fincial stimulus will work: people are scared.. And scared people do not spend..

    And house prices have still another 40% odd to fall...

    Not the background for economic recovery before 2010 - just in time for tax rises to screw us all...

  • Comment number 7.

    Osborne is right. A collapse in our currency would be FAR worse than a recession. Forget the bailouts, stimuli and borrowing and PROTECT the pound. We need 20% interest rates.

  • Comment number 8.

    I consider George Osborne's comments to be damaging to the UK and find it hard to understand why he made them at this point. Why remark on the obvious in an uneccessary way unless to score political points?
    And what is to be gained by further damaging confidence in the UK in the process?
    One of the causes of the lowering of the value of the pound is historic. Because we have stayed out of the Euro zone, other members of the EU, such as the Republic of Ireland, have been attracting a lot of the investment which could have been won by the UK.
    Are we likely to elect a party with a potential chancellor who jeopardises confidence in the UK for political point scoring? Can't he come up with something constructive to see us through this recession? We might listen and have a bit more respect for him if he did!

  • Comment number 9.

    The depth of the borrowings have yet to be truly revealed - how much debt has already been passed down to future generations by the disasterous PFI spending on schools and hospitals ?

    Brown and Darling are clinging to the belief they can hang onto power by a tax giveaway and a snap election ~ sadly that may be true, especially with the backing they receive from the media.

  • Comment number 10.

    Osborne is completely right - we have a mountain of debt and the value of the pound is already declining dramatically. This can only get worse if the goverment does borrow more to cut taxes. Personally I think anything Brown does will be small and aimed at those people who will be paying more due to the 10p tax debacle

    The earlier point is correct - all Brown can do is attack the messanger - no attack on the message

    By the way - well done Nick - a good piece with good analysis

  • Comment number 11.

    Incredible post from newtactic - he recommends not talking about the budget deficit because that only makes it worse !

    Are you Tony Blair in disguise ?

    His first defense was always to deny everything, and look how successful that was.

  • Comment number 12.

    Osborne may well be correct, but his political judgement is seriously flawed. He has put his foot firmly in it again, it would be different if he came up with some alternatives.

  • Comment number 13.

    Does anybody really think that the currency market is hanging on the words of George Osborne ??

    Get real. The pound had fallen to a six year low against the dollar and an all time low against the Euro all before Osborne uttered a word.

    Come to think of it, does anybody really think the currency market has been hanging on the words of Gordon "We have the best placed economy" Brown ? The problem is that market don't believe Brown's view and probably don't think he believes it himself. Hence the more he has talked things up, the lower the pound has sunk.

    The performance of the pound is driven by the market's view of current state and prospects of our economy.

    The views of such as Lord Burns, the EU, IMF and other detached experts are much more likely to be influential.

    Why Osborne came out with this stuff, only he will know. It won't make a bit of difference either way but it will allow Labour to play the irresponsible behaviour card.

  • Comment number 14.

    I believe that Osborne is simply trying to score a political point.

  • Comment number 15.

    Oh dear - it's not happy reading. Gordon Brown is behaving like a clumsy carpenter with a wobbly table, chopping and hacking at each leg in turn and not realising that the more he fiddles and pretends he can save the situation, the more ridiculous the whole thing looks.

    I would have thought it obvious that if many of the population have borrowed beyond their means, and the government has spent beyond its means, that the last action of sane man would be to throw more money he hasn't got at attempts to make people spend more of what they haven't got either....

  • Comment number 16.

    Why is Labour upset by Osborne? Only a short while ago we had Alistair Darling going very public saying that things were the worst in the financial sector for 60 years etc etc. Then we had Robert Peston being feed every gloom and doom story about the uk`s banks; but I don`t remember Labour complaining about his rectoric of failures within the banking sector. In actual fact I think they encouraged his "gloom and doom" reporting for their own politicial ends. I think we saw the real Gordon Brown at PMQs about Baby P saga and saw how leaden he really is a leader. As the days pass his world economy tosh - How we as a country are better placed to ride this credit crunch out etc etc is being seen for what it is. A cover story. Labour caused many of our current problems in the first place and by remaining in power they are now THE problem. They only know one way to govern and that is to spend more than the country earns with no thought about getting value for money. Being prudent. Don`t make me laugh. GB could not be prudent if he tried. The next idea. Give more to those on benefits. All I can say elections are not won by the opposition; but lost by the party in the power. Stick to that plan of giveways to the unemployable Gordon and you will lose big time. No wonder GB has been out of the UK so much lately. TB did the same as people could no longer stomach him. Gordon is totally out of his depth and we are totally incapable of doing anything about it until this Govt runs out of time and has to go to the country - whatever will be left by that time heaven knows. Getting back to George Osborne. There is no doubt he is totally right in what he says; but because of the yacht saga I think now he lacks personal credibilty. The Conservative Party needs to bit the bullet and off load him for a big hitter such as William Haig or someone of his ilke. David Cameron needs to get it sorted and quick. Labour needs to be tackled head on about the dire state of the counrty`s finances without the subliminal reminders of Mandy and George`s summer holiday.

  • Comment number 17.

    This isn't a one-party state- the opposition is there to oppose when it feels it ought to and should be able to express its opposition at all times. That is for the good of the country. The PM should get on with prime ministering if he is up to it instead of trying to stifle dissent. Suggesting that the oppo is 'playing party politics' is itself an example of party politics.

  • Comment number 18.

    How is it possible to talk down an economy that is already in the gutter thanks to 11 years of Gordon Brown's stewardship?

    And while I am at it, why do BBC headlines lead on Labour's response rather than Conservatives original comments?

  • Comment number 19.

    Totally agree with George Osbornes statement. It is high time Gordon Brown's spending plan was challenged. As he [GB] is constantly these are difficult times and the public should be warned about what GB is planning to do and its potential long term effect.

    "What, though, of the backing of the Governor of the Bank of England? Osborne points to the two caveats that Mervyn King added - that any stimulus be temporary and be accompanied by government setting out a clear path back to prudent levels of borrowing"

    Problem with GB is that his stimulus period could run for up to 2 years and right now we are now seeing a clear plan. Just borrow to make the electorate more comfortable.

    The Conservatives must challenge GB & Darling because right now their plans look very dangerous indeed, given the current debt levels and trade deficit.

  • Comment number 20.

    A number of people have been warning of a possible run on Sterling for some time, and it's quite sad that it's taken Osborne opening his mouth for it to receive any publicity.

    Sterling has been on a downward trend against all other developed currencies, which is an indicator of just how little faith investors have in near-future of the UK economy compared to other nations.

    Heavy borrowing, falling interest rates and the fact we are not - despite Labour spin - best placed to weather the global recession are all having a downward pressure on the pound.

    Labour seriously need to stop spinning, pull Brown out his Norma Desmond impersonation and start doing what they were voted in for - running the country.

  • Comment number 21.

    The idea that one man (never mind one not in power) can "talk down" the currency is laughable and shows a lack of economic understanding. The British economy is in trouble and global markets and international investors know it. The fall against the dollar and the euro is evidence of the problems we face relative to the US and EU, it's not because the Shadow Chancellor has opened his mouth and talked sterling down!

    Surely we can't expect the Conservatives or Lib Dems to keep quiet if they think Labour are damaging the economy, just because it's a crisis - no matter how international Brown wants to say it is, this crisis is at least as much Labour's fault as it is anyone elses.

  • Comment number 22.

    Am i missing something here? dont we want a weak exchange rate? inflation is not going to be a problem for the foreseeable future, but like the period after devaluation in the aftermath of ERN, a weak currency would help to get the economy moving again by boosting the export sector and encourage consumers to buy more home grown rather than imported goods...

  • Comment number 23.

    Perhaps we should listen more to the views of economics nobel prize winner Paul Krugman, and BoE governor Mervyn King, than history and politics graduate Osbourne, regardless of how well funded his office is...

  • Comment number 24.

    We are spending far more on imports than we are receiving on exports. The Govt has a large and growing deficit on expenditure which has vastly increased Govt borrowings. Falling interest rates will also reduce our already historically low savings rates.

    All these deficits need to be funded and I'm not sure how it can be achieved without raising interest rates, rising inflation and a background of a falling exchange rate. We are in BIG trouble, thanks to the economic mismanagement of this incompetant Govt over the last 11 years.

    On the other hand, it is clear that the dollar is over valued and is increasing in value, not because of the strength of the US economy but because of huge demand for dollars to settle outstanding contracts arising from the unravelling credit crunch. When this pressure unwinds, I would expect to see the dollar fall in value.

    As to the Eurozone, they are heading into recession led by their biggest economy, Germany. The strength of the Euro is particularly damaging to German exports and this will drag the Eurozone into a deeper recession. It will be particulalry damaging for Italy and the weaker economies of the Eurozone.

    Bad as our position is, I'm glad that we aren't members of the Eurozone as I believe that if we were trapped in the Eurozone with their overvalued currency and with no control over monetary poicy, our position would be far worse and the recession we would suffer would be far longer and much deeper as a result.

  • Comment number 25.

    Secret Love @ 11. I'm not Tony Blair in disguise. I share nothing with him, not his politics or even his gender! I've just been aware the pound has been falling in value for some months. It has meant people from abroad have been having cheap holidays here for a long time and we have had expensive holidays abroad (if we can afford them). It has meant that imports are more expensive, but our exports are cheaper for other countries.
    I will re-iterate what I said in my "incredible" post. I can't understand why George Osborne should be remarking on the obvious in this way. I find it disappointing for a potential chancellor to be coming up with negative comments rather than constructive ones. Is that so incredible? We need opposition parties who can offer something positive if we are to consider electing them. Is that so incredible?

  • Comment number 26.

    Come on Nick

    Mr Brown has been talking down the pound at every oportunity. Even this weekend he's telling everyone who will listen that their is plenty more cuts in interest rates to come.
    Stop being so neive, Mr Brown is'nt.

    He knows that the rate cut can't stop the contraction whilst Banks and hence businesses are forced to deleverage.

    So why is he pushing it? He must want the pound to fall.

    May be he thinks if we all have more pounds in our pockets we'll vote Labour even if they are worth less.

    Oh sillyu me Labour tried that before. The pound in your pocket.....

  • Comment number 27.

    George is in a blue funk. His best strategy is to keep his head down. But the funk calls forth action. So, talk rubbish - even if does damage - rather than do nothing.
    This is a real test for David Cameron - he needs to hand out a Tory ASBO to George or he too will go down in history as a Bullingdon stalwart. Now is the time for David to break with the silly bits of his past. Sack George now.

  • Comment number 28.

    Sterling gets kicked around by the City. (That is why they do not want the Euro, incidentally.)

    I recall trying to do export business when sterling was 2.40 to the US Dollar - It was almost impossible to compete. (This was under Mrs Thatcher) I also recall some very low valuations 1.3 or 4 - lovely to export goods, but unfortunately all our manufacturing capacity has been slaughtered by the 2.40 earlier! ( I also recall being told of 4 or 5 US dollars to the pound by my father.)

    What business needs is certainty of raw material cost and export price. (That is why we should be in the Euro as 60 percent of our export business is done in Europe.)

    However the City needs volatility; ups and downs and uncertainty benefit traders in the City.

    So, George Osborne, is acting like a good Tory and magnifying uncertainty so that the City (we suppose to be his friends) can make money. Or he is just being ignorant or just plain mischievous.

    Just keep announcing policies George - you have next to no chance of implementing any of them.

    I go back to my point about interest rates (that nobody seems to want to react to!) Interest rates may have been lowered by 1.5 percent and the treat of further reduction has been made, but Barclays is paying 14 percent for it new capital - the spread between small savers and big investors is astronomic and can not last. The whole market is unstable.

    The Banks will not follow the Bank of England down as they need to attract money - The Bank of England will have, in the end, to follow the Banks and put up rates to a sensible level (6 or 7 percent) sometime sooner rather than later. The present spread in the market is unsustainable and the Bank of England has lost.

    We are getting the worst of all Worlds, a situation that is not unusual for the UK, The perception that interest rates will be lowered too far depressing sterling and an actuality for big investors of ever higher interest rates to discount the effect of the lowering in sterling. This will force domestic rates up and is a highly unstable situation which the City will make money out of (just as intended, Mr Osborne) and for which the people will pay.

    A lot of this can be put at the door of Mervyn King. I still do not understand why lower interest rate will not re-inflate the property bubble. Perhaps that is the intention, so that equity release can start again and this can boost the GDP. This is a really daft idea Mr King! (about the daftest anyone can possible have in present circumstances.)

  • Comment number 29.

    The idea that one man's words can damage the currency is ludicrous.

    And so is the "oh it's good for exports" fallacy. What do we export anyway? We don't manufacture anything.

  • Comment number 30.

    Here's something interesting.

    Gordon Brown and his friends are trying to present him as the economic saviour of the world, the man to whom other world leaders are turning in their hour of need.

    Yet I've been reading the fascinating article in today's Washington Post about the G20 meeting. Fascinating not because of what is in the article, but because of what isn't. As one might expect, the countries in attendance and their world leaders are mentioned in the piece, but there is one very notable exception: Gordon Brown. The article runs to 2 pages, yet the man who claims to be running the show and leading by example isn't mentioned once when practically everyone else is.

    Perhaps the G20 meeting isn't the Gordon Brown show after all. Perhaps other leaders are not so keen to take advice from a man who is dealing with a much bigger debt burden than any comparable economy. Maybe the narrative in this country's media is a little out-of-touch with reality and is due a correction - rather like the economy, some might say.

  • Comment number 31.

    @25 - Apologies for my error over your gender.

    With Labour's policy of stealing ideas and claiming the credit of course Osbourne isn't going to proffer suggestions to resolve 11 years of mismanagement - the best solution would be for the government to resign - and possibly the only chance we have.

    Staying out of the Euro-zone has protected our economy, not the obverse. Ireland attracted money by getting EU money (from us) and spending it sensibly on improving infrastructure and offering low rates and startup bonuses to companies to come aboard. They're also going to be amongst the hardest hit as American companies shed jobs this side of the water rather than at home.

    We'll lose out in this country as labour intensive work is moved to cheap labour pools in the emerging countries of central Europe and the Far East.

  • Comment number 32.

    All hail the mighty leader and his glorious trips to the ends of the earth to save us from this Osborne man.

    What nonsense.

    The economy is an absolute mess, the pound has lost a quarter of its value in 3 months, and all before Osborne even said a word. Maybe the real culprits - those in Nos. 10 and 11 - should get their heads out of the sand and aknowledge their mistakes before it's too late.

  • Comment number 33.

    As long as Nu-Lab are in power
    They'll do nothing else but devour
    All the money we earn
    (Brown it's not yours to burn)
    We've no choice but to kick out this shower.

  • Comment number 34.

    newtactic says "I can't understand why George Osborne should be remarking"

    I would suggest its called politics. George thinks what Gordon is proposing is wrong and that if correctly briefed others will also see it is wrong. If so he "George" will gain political strength.

    As to the facts.
    If Gordon is merely using spin to cover his massive structural overspending then the sooner we all demand he stops the better for all.
    If Gordon can persuade the rich countries to inject Fiscal stimulus great he's a giant on the world stage.
    If Gordon is going to spend our last available credit on daft useless waste just before we face a decade of paying for it then at best we should demand he be forced to sign up to an IVA or Debt management plan, failing that an election

  • Comment number 35.

    Brown calling for more interest rate cuts has done more damage than Osborne has today.

    Brown hiding the massive debts of PFI, Network Rail and Northern Rock has done more damage to Sterling than Osborne did today.

    Brown wanting to borrow more will do more damage to Sterling than Osborne did today.

    The City has spoken, we are still on the downward slide of this recession and Sterling has lost 25% already.

    This is Brown fault, no one else's - Brown's.

    When Darling was very vocal on our economic chances when Brown was practically booted out, that did far more damage.

    And Peston's "scoops" did more damage too.

    Osborne makes a very good point.

    A Keynesian splurge is not the answer, Labour touted that and then dropped it.

    So much for Krugman.

    Now a Monetary splurge by borrowing money to cut taxes will not work.

    What is needed is to slash government spending, trim out the fat, close the quangos and cut taxes.

    The city will recognise that, Sterling can be allowed to find a proper level and borrowing does not increase.

    Better still, the tax cuts are likely to be far more permanent than 'temporary' - in other words, higher later to pay for them.

  • Comment number 36.

    Osbourne is very wrong. He is running down the country. It is high time Her Majesty's Opposition stood square behind the Government, regardless of party sniping. Take the example of Obama's election when every US politician, regardless of party, stood up and backed him to the hilt. Sometimes we just need to think of country before party. Osbourne has put his foot in it again and should be sacked

  • Comment number 37.

    Brown's a bloodsucking parasite
    Who cares nothing for the public's plight,
    And he'll take any chance
    For personal advance;
    Nu-Labour's reign is a blight.

  • Comment number 38.

    With the pound already dropping like a brick down a well,and the stock market crushed there is only Gordon Brown saying things are all rosy in the garden and like Baldrick he has a cunning plan....

    Well the cunning plan is ????........ because everything done up to press is going to make things far worse before they get better....

    And as for Osborne playing party politics its his job,and he would be attacked for saying nothing........its all Labour have left is personal attacks,everything else is phoney !!!

  • Comment number 39.

    It's not Osborne who's being irresponsible it's Brown and Darling with their ever more desperate "re-arranging the deckchairs on the Titanic". Brown is once again showing his financial naivety,something those us who could see past his self-proclaimed brilliance over the last decade are only too aware of.
    Other countries can afford to spend their way out of recession,can afford tax cuts and rebates because they did what Brown seems incapable of getting his head round and put money away in the good times in case of bad times.A former Chancellor shouldn't need to be reminded that if you borrow money you have to pay it back,if you're in debt you can't borrow your way out of it and when you're in a hole it's time to lay the spade aside,not hire a JCB.
    Brown's brief metamorphosis from Village Idiot to "maybe there's a brain in there somewhere" is over and we're back to hideous gaffes like his disgraceful blusterings at this weeks PMQs,ill-thought -out knee-jerk policies and speeches full of half truths that the media rip to shreds within minutes.At some point someone is going to have to address our ever-escalating national debt,something else Brown seems incapable of telling the whole truth about,even now he's handing out taxpayer's cash to the useless and feckless,this time it's money for fat people to lose weight while pensioners have to watch every penny they spend feeding themselves.
    Brown has been a total disaster,a total failure as a PM who's reaping what he sowed as a total failure of a Chancellor,only him,those on Planet Nulab and Nick Robinson don't seem to realise this.
    Typical of Brown was his much-publicised trip to meet "the oil-producing countries". Take a trip to Aberdeen Gordon,take a ride in a helicopter and marvel at all those metal things in the sea,what might they be? Maybe he meant "the oil-producing countries whose dim-witted leaders didn't squander all the oil money".
    And no I'm not a Tory,just another disgusted and disillusioned ex-Labour supporter.

  • Comment number 40.

    Nick, I dare you in the interests of political balance to post a link to the recent piece in the FT by Willem Buiter (ex-MPC) who illustrates exactly why the UK is facing a significant risk of a collapse in the pound, amongst other things. In fact he compares London to Reykjavik-On-Thames.

    George Osborne is only echoing the comments made by former MPC members.

  • Comment number 41.

    36 said:

    "It is high time Her Majesty's Opposition stood square behind the Government."

    They are called the Opposition for a reason; when the government does something stupid, or makes decisions that are bad for the country, the opposition are supposed to call them out on it. Sorry we don't live in Soviet Russia.

    "Take the example of Obama's election when every US politician, regardless of party, stood up and backed him to the hilt."

    Except, you know, his opponents...

  • Comment number 42.

    Can anyone explain why on the Today programme Osborne's comments are given prominence, but when the item is actually discussed the BBC do not wheel out learned economists to help us understand better what may well be the truth but a beeboid correspondent who sets about character assassination of Osborne telling us about RON, that he has not got many "friends" in the Tory party and it's wrong of him to whistle blow.

    The money market would already seemed to have judged the situation with the "independent" Bank of England being strong armed into reducing the interest rate, which had been a major prop in holding sterling's value up.

    Shoot the messenger in fact, particularly if he is Tory and even more so if it is George Osbourne.

    BBC bias on show again? I think so.

  • Comment number 43.

    Young George Osborne just doesn't seem to be able to stop putting his foot in it. Whether to borrow to boost the economy is a matter for serious debate. Personally, I feel the timing is wrong, as to do so it needs something to grip on, and there is just too much uncertainty in the global economy at present.

    Which brings us onto one of the knowns, that the market will respond to sentiment and confidence. So to use such language as "a proper sterling collapse" in public like this in Mr Osborne's position is either reckless or deliberate.

    He just seems completely out of his depth, as shown by the lack of anything constructive from him in recent weeks in the crucial period, and that slightly lost expression we have got used to now replacing the smug look of old. But now it also appears our Gideon is more interested in his and his party's position than that of the country. He has clearly put the former before the latter in using language such as this.

    So a serious test lies ahead now for Mr Cameron as well. As the shadow chancellor hesitates then fumbles, and shows successive failures in judgement - does Mr Cameron have the courage to replace his Bullingdon friend?

  • Comment number 44.

    In reply to post 36... what a load of rubbish.

    The most relevant American parallel would be what happened when Bush proposed a $700 bn bailout.

    Did the Democrats meekly accept it rather than disagree? No, they voted it down, and the package was only accepted at the second attempt.

    Brown criticises Conservatives for having no policies, he criticises them for having policies. He doesn't believe in borrowing, he does believe in borrowing. He increases tax on the low paid, he wants to reduce tax on the low paid.

    He is a hypocrite who wants to distract attention from his own failures.

  • Comment number 45.

    It is unfortunate that we have a priminster of such mediocre abilities.
    This economic crisis could have been prevented, with three simple rules.
    1.Banks could lend more than 70% of the value of a house. 2. Not lend more than 3 times joint income. 3. Any institution giving a credit facility, ie loan or credit card had to be sure that total loan repayments (including theirs) did not exceed 40% net income.
    If Gordon had done that 10 years ago, how many people would be struggling with debt today. Very few.
    But then he would not have had all that lovely tax money that he squandered.
    Gordon now has no more money than the council tenant borrowing from a loan shark to pay bills now due.
    This fool still does not understand that when you borrow today, you will spend less tomorrow. Well Gordon. Tomorrow is here.

  • Comment number 46.

    Look at it from Good-time Georges point of view. He's just returned from his holidays and has told everybody that he has been doing Caroline Spelman's job because she has been working at home. The 1922 Committee think he is rubbish at his job and his best mate David Cameron has taken over the economic brief using all of the knowledge he gained from Lord Lamont. The Sunday papers are going to give him a hard time so he needs to make an impact. Last time he briefed Journalists about what he had been told in confidential briefings so he's got nothing to lose. Sod the economy he's got to look after his career. Any other questions?

  • Comment number 47.

    This is all the golem Brown's fault - he was overtaken by his desire to be prime minister that he lost sight of his job as chancellor. He fuelled the most irresponsible practices of the banks (and copied their "off balence sheet" accounting with PFI) and bowed before the almighty "masters of the universe".
    All these redundancies going around and the one who really deserves his P45 is the golem at No 10. But eventually he'll be kicked out to some non-executive directorships and the like while those devastated and destroyed by his policies will struggle on.

  • Comment number 48.

    It's not just George Osborne saying this - listen to Willem Buiter (professor of European Political Economy at the London School of Economics) on the Today programme on Friday. The interview with him starts about 4 minutes in to the following replay:

    Enough to put you off your cornflakes!

  • Comment number 49.

    Has Gordon found a newcatch phrase.Last week he acussed David Cameron of playing party politics over baby P.This weekend hes at it again with Osborne. Prudence has got a lot to anwser for and the sooner the Conservatives start to attack him the better.

  • Comment number 50.

    I am not a financial expert so I can not comment on which way is correct to lead the way out of the current economic mess.

    What bothers me greatly is the lack of sensible debate that I believe is needed.

    Every time someone raises an alternative or disagrees with Brown, or one of his Ministers, they are met with a torrent of ridicule or told they are not helping the country. This occurs regardless of the subject in question.

    In my opinion, the current Labour government are becoming more intolerant of debate than any political party I can remember.

    This does not bode well for our democracy.

  • Comment number 51.

    I'm beginning to think Gordon Brown is a genius. He has done more damage to the economy of England than any Scot since William Wallace.

    Could one man be so self-serving that he would destroy his country to further his own ambitions ? Or does he have a different agenda ?

  • Comment number 52.

    i think it is obvious that this governments reasons for there method of dealing with the problem of the ecconomy is to ruin the pound and thus force us into the euro without any refferendum or debate.

    this is the legacy of the blair policy of crippling this country reducing it to a also ran in european terms, these neu labour traitors dont care they will probably recieve a nice bonus from there european bosses.

    osborne may have spoken true but sadly little to late and with no sign of a general election there is nothing we can do but accept what this traitorous government are doing.

  • Comment number 53.

    A slightly selective post there in number 30, as another Washington Post article today on the actual output of the meeting includes reference and such quotes as, "Brown has taken a lead in pushing for a global coordination of county-by-country economic aid plans." Reference to the New York Times critique of Brown on 13th October may also make you pause and reflect. (Or not, of course, if taking the soft route of let's blame Brown for everything is just easier).

    Don't get me wrong - Brown has made mistakes, and it is to a large extent Darling that has been something of a surprise in recent months and has a lot to take credit for. But compared to the paucity of ideas coming from the opposition, there seems little doubt we would be a lot worse off right now with the Tweedledee and Tweedledum combination of Cameron and Osborne. All Mr Osborne has done today is underline that with yet another lapse in judgement in the language he has used. Hopefully the markets do not take him seriously enough for this to do real damage come Monday morning.

  • Comment number 54.

    Osborne is absolutely right, the markets are very politically independent and they will punish very severely ( as they have always done in the past ) any imprudent management of the economy. The markets have already shown what they think of Bust Gordon and the pound has already been devalued following Brown mismanagement of the economy

    Anybody daring to express a critical opinion of the the great leader is branded as a traitor , sounds more and more like Stalin than Mr Bean.
    Perhaps Crash Gordon is getting a bit nervous and scared that he is about to be found out .
    Perhaps he is not the great world leader he thinks he is and that other countries are not prepared to take lessons from the man who is responsible for wrecking his own country economy

  • Comment number 55.

    Anybody out there old enough to remember Wilson H and "the pound in your pocket"?

    If this does not work and Brown has to go to the IMF, the terms are going to be very onerous indeed.

    Be afraid. Be very afraid.

  • Comment number 56.

    Batson_D_Belfry no one can be that deaf dumb and blind even a bat.

    Darling and Brown have already said UK is facing its worst Financial meltdown in sixty years.

    Osborne has merely said if brown borrows with no clear plan to tax us to pay it back the market will punish us.

    If you read what the Bank of England said it is exactly the same.

    Osborne's point is standard text book and true. He cannot impact the market by saying it as the markets already know. Thats why they are dumping pounds.

  • Comment number 57.

    How much of this current disaster was fuelled by Gordon's decision to take house prices out of the RPI ?

    It allowed house prices to escalate without his precious inflation figures being affected and so everyone felt secure because they had the security of their own home.

    This then meant that house prices reached such ludicrous values that the housing market was under threat. So Gordon allows the FSA to relax the rules on how much you can borrow - or the need to prove you can pay it back. House prices carry on upwards and Gordon can carry on boasting about how he's ended boom and bust.

    Well he's ended it now ~ with bankruptcy !

  • Comment number 58.

    Someone had to say something. Brown was starting to believe his own spin.

    The man has crashed the economy and we have to keep a very watchful eye on everything he does until he has been removed.

    Brown's actions are calculated to save his job. We have to question if any plans are actually in the best interests of the UK as well.

  • Comment number 59.

    Stay silent and be supportive in that way draws Labour attacks of "no solution from the Tories". Have the temerity to criticise and a receive a broadside from the PM for being irresponsible. It is unwise of Mr Brown to go anywhere near the word "irresponsible" while talking about the finances of the UK. He has let debt (both public and private) rip for the past decade and we are all now about to start paying the price. Some of those reading this blog will lose their jobs, more will see their budgets tighten, we will ALL pay even more in our taxes. My only hope rests in an election in which the following sadly may be proved to be true: Britain votes in a Labour Government with an empty head and votes it out with an empty wallet.

  • Comment number 60.

    Mr Robinson is in danger of declaring his colours.

    I'm not declaring mine just yet cos I'm a Scot and that would raise hackles in deepest Englandshire.
    Anyway I think we should try our best to pull to-gether for a wee while.

  • Comment number 61.

    Well said George Osborne
    It is about time someone had the courage to tell it the way it is- overseas investors and indeed speculators know exactly what is going on and they do not like what they see.
    Funding the government is current done by around 75 percent of overseas investors -last week we saw several other gilt issues in the market and there is so much more to be funded
    Investors are unlikely to do it unless long term interest rates are higher and if course the more money you raise the more the country has to earn each year to pay the interest let alone the capital

  • Comment number 62.

    Two things spring to mind.

    A Darling, then the head of the BOE, then Brown have all stated that we are in a bad way and all 3 sets of comments caused large drops in the value of the pound.

    The 1st of December will mark the end of a lot of small businesses, my because the Vat and Duty free import limit will change from £19 to £105. That means that ANY thing from perfume thru DVD's to small electronic devices will be imported instead of being brought from the high street and small retailes.

    All I can say is in the difficult time Thanks a Lot Gorden this tax change could be the christmas death nail in a lot of UK businesses.

  • Comment number 63.

    Osborne is telling it as it is. A fool like me could and did work it out a while ago. There will be a run on the pound and interest rates need to rise not fall, spending has to be reined in, not increased. It will be painful, I realise, but the alternative is mass unemployment and a longer recession.
    Take your pick.
    It would also be interesting to know if Gordon Brown honestly believes he can win the next general election. If he doesn't then the policy he is following is perfect - diabolic for the country, perfect for the new opposition.
    I wonder ....

  • Comment number 64.

    And I thought that it was Gordon Brown who's been talking down Sterling for the last 2 months.

    No doubt if it goes down the plughole sometime in the next couple of months this lousy government will say it's all Osborne's fault. True to form Brown never admits his own mistakes; like the last 10 years of debt funded boom.

  • Comment number 65.

    The real issue is not what Osborne, Cameron, or anyone else thinks.

    This crisis is Flash Gordon's greatest pride and joy. He has spent years and years waiting for his big chance to same the entire planet single handed. If someone else has any ideas about how to do it, he gets really annoyed. And if someone else has some sensible, practical ideas that might actually work, he gets REALLY REALLY annoyed.

    The kindest thing to do would be just sedate GB and wake him up when it's all over - 2015 should be about right.

  • Comment number 66.


    Mr Osborne is doing your job highlighting the shocking decline in our currency something you and the other BBC Labour puppets should be doing.

  • Comment number 67.

    The pound was already collapsing before Osborne's statement.He is merely telling the truth unlike Brown who will blame everyone else but himself and his party.No amount of Mandy/Cambell spin will convince us otherwise.

  • Comment number 68.

    Nick, raising a vaild point of concern, which Osborne did, is very different from scare-mongering. Cant the PM see whats in front of him or has he completely lost the plot now?

  • Comment number 69.

    This attack on Osbourne is bullying no more no less..

    If you assume he is a truthful person and really believes what he says and really unless there is proof to the contrary then he must be taken at face value.

    This is indeed a very worrying alarm and one we should all be taking seriously..

    If he thought this and kept quiet for fear of being accussed of scaremongering then he would really be irresponsible.. Also if this is what he believes then he should say so as Brown will be very quick to say it was unforseen by the tories too and leave himself blameless.

    Shame then Osbourne is being shot down for what is likely to be true.

  • Comment number 70.

    I've just realised what George Osborne is up to: if he can't stop bankers being paid their obscene bonuses, then he'll do what he can to see that the money isn't worth anything. He must have been to the Gerald Ratner school of Say What You Think. Best keep him in in a sound proof room, preferably with Mervyn King.

  • Comment number 71.

    Brown has not balanced a budget since 2002 and has increased debt by over £200bn, even before Northern Rock and the bail outs started, never mind the £100+bn of PFI and £1trillion of public sector pension liabilities.

    He is an economic incompetent and that he is now playing the man, not the ball, shows how devoid of ideas he is.

    Shame the BBC allowed itself to be spun.

  • Comment number 72.

    On his BBC report Nick Robinson said that The Labour Party were delighted by what they perceived to be a mistake on George Osborne's part. It gives them the opportunity to make some political capital out of his intervention as well as absolving themselves of blame if their policies backfire. A sweet double whammy as they say. They're not in the least bit concerned about any ramifications. The run on sterling has nothing to do with The Opposition and everything to do with the policies of The Government.

  • Comment number 73.

    Anyone else notice the Institutional bias on the BBC website
    Since when did Osborne "attack" the government policy?

  • Comment number 74.

    Osborne's right. He's just pointing out the risks we run. Brown's strategy is to make any questioning of his policy somehow disloyal. It's not. The truth is, far from being the best placed in Europe to weather this self-inflicted crisis, we are in the worst condition to do so and that's because under McPrudence we squandered our strong fiscal position and allowed the City to rip.

  • Comment number 75.

    Osborne is right to state what is obvious to anyone with a basic grasp of economics - unfortunately this is something Brown is lacking in. To accuse him of trying to talk the market down is rather ridiculous, as the £ has managed to fall over 25% with Gordon doing all the talking up until now.

    When Gordon and his BoE poodles cut IRs further, and the £ drops to 1$, who's he going to blame then?

  • Comment number 76.

    Of course Brown's actions will lead to a run on the pound, but then a desperate man will do anything to attempt to save his rapidly disintegrating reputation.

    The fact of the matter is that the pound has already devalued relative to other currencies - it is 25% down against the Dollar, 40% down against the Yen, 30% down against the Hong Kong Dollar, 14% down against the Euro and so forth.

    Unfortunately, it is now becoming abundantly clear that the whole world has indulged itself in bogus lending above and beyond the capacity of us all to repay the amount of debt.

    Closer to home, it beggars belief that no one could see that we were creating an unsustainable economic mirage. It is all very well for Osborne and the Tories to now talk the talk now, but they, and the Lib Dems, were part of a foolhardy political consensus that has brought us to our knees.

    For years, we hid the real rate of inflation and masked the widening chasm between earnings,which have been falling in real terms, and the ever increasing costs of living, with a range of credit mechanisms. The luck had to run out sooner or later.

    I really can't see any way of this mess - and, if they are honest, neither can our political and economic masters. Dire times indeed.

  • Comment number 77.

    I notice Secret Love @ 57 may be missing the point about the housing market.
    The house prices in the UK went up because it was easy to get a mortgage and demand for houses in some parts of the country exceeded available housing stock, although this was not the case all over the country.
    Add to this that figures from various sources quoted asking prices rather than actual selling prices. This meant house price averages were exaggerated as well as being inflated by demand.
    Because speculations were made by some UK companies on "sub prime" or "shack" properties, speculators and investors sold and bought shares in properties which were not worth much and were occupied by mortgagees who could not meet their commitments. This created a huge property black hole and, when exposed, resulted in a near moritorium on mortgage lending.
    Housebuyers were unable to get mortgages and this reversed the situation. Because demand fell, so did the prices... to a more realistic level.
    Given the above, I would have thought taking house prices out of the RPI was quite a sensible move. I would be delighted if Secret Love would explain to me how it could have caused house price inflation and the current economic slow down.

  • Comment number 78.

    If Osborne was predicting a Sterling collapse at a time when everything seemed OK and the currency was stable, this might have seemed irresponsible. In fact, he is warning us about continuing down a disastrous policy road.

    The reality is that Sterling is ALREADY crashing against other currencies. Just look at what this tells us. International markets think that the UK outlook is worse than that of the Eurozone countries (despite the acknowledged onset of recession there), and worse even than that of the US (where, on top of other economic problems, the hugely important auto industry is in very deep trouble).

    Brown's mantra of borrowing our way out of trouble needs to be challenged, because it is excessive borrowing that has got us into this mess in the first place. Osborne is right to warn about the risks that are being taken.

    Even presupposing that HMG is able to borrow tens of billions more - which, given the state of the forex markets, seems doubtful - the cost of this borrowing, and the broader economic implications, are scary.

    I know that I may be derided as a doom-monger for saying this, but I believe that the forex markets may be accurate lead-indicators for a full-blown UK economic collapse. The risk of economic catastrophe is now being priced into Sterling. My best guess is that this could happen as early as the first quarter of 2009. Just this time, I really hope that I am wrong.

  • Comment number 79.

    Brown is obviously the monster behind our financial disaster - but like Mandleson, is beyond any censure.

    So maybe a better target for our ire is darling -- we know brown is mad, but it is darling would get more credit as 'the man who save the UK from mad brown' than 'the mad who stood next to brown'...

    Talking of Mandleson - any progress on that story Nick?

  • Comment number 80.

    #36 Bradgate5 wrote:

    "Osbourne is very wrong. He is running down the country. It is high time Her Majesty's Opposition stood square behind the Government, regardless of party sniping. Take the example of Obama's election when every US politician, regardless of party, stood up and backed him to the hilt. Sometimes we just need to think of country before party. Osbourne has put his foot in it again and should be sacked"

    If a drunk pulls you into the gutter, when you're just quietly trying to get on with your life, there is a tendency to suggest that maybe the drunk could change his ways.

    Brown has taxed without genuine reflection (or understanding). I've posted before that you can't expect a politician to hold Ministerial office ONLY if they have qualifications and experience within a given sphere.

    Brown was an historian. Not an economist. That should be no disqualification. As long as you take a sensible view, politicians should be able to handle difficult briefs.

    Best Chancellor I recall was Ken Clarke. A barrister. But using quite a lot of common sense.

    Brown has been extraordinarily political, rather than common-sensical, through his life in Government.

    That's why the 10p tax-band was scrapped... it was a good idea, which he introduced, then chose to jettison.

    But he now says that help should be directed towards the poorer? Hello... Who set that policy and refused to change it, when all parties said it was a dumb move?

    That's why he hit the amount of money "allowed" to go into private pension funds. No doubt his "economic advisors" convinced him that companies would pay out more dividends, so there would be some compensation. Nonsense. Companies pay dividends when they can and it helps them.

    Some may wonder why the MG rump was allowed to be bought by a bunch of folk who sucked out what they could, then folded the company. (Not sure what happened to a report I was sure was due to examine how Stephen Byers was allowed to make that decision, with the Blair/Brown combine in control. Still don't really know why a sudden injection of government cash was permitted, to avoid MG slashing jobs just before an election.)

    I don't much like Osborne. Seems a clever operator. But you could say that about Mandelson. But to say he's talking down sterling is pretty crass.

    The currency is plummeting. That's a fact. It needs a degree of protection.

    But, at least - being outside the Euro-zone - the BoE is able to adjust interest rates to attempt to influence domestic affairs.

    I guess that obstructing our rapid entry into the Euro is the one achievement for which I applaud Brown.

    Just means that local politicians have to be a bit smarter when they take our money, decide what to spend it on and then create an environment which makes people spend with caution and save for the inevitable, post-work life.

    The guy hasn't ticked too many boxes.

    Goodness help us if Brown is the acclaimed leader of the global financial world...

  • Comment number 81.

    The 'experts' are the people who have caused this situation in the first place, why should one believe any self avowed 'expert' at all.

    I bet I could hazard a guess at what to do, having no knowledge of economics and by random chance might just get it right.

    So is it Gordon or is it George, umm ?

    eni meany miney moe catch a tiger by the toe if it bites or if it snarls what ever you do let it go.

    My well considered and totally unbiased opinion is that George is right or maybe..........oh dear !???

  • Comment number 82.

    This is desperation from George Osborne. Forget the convention of not talking down the pound amidst an economic crisis. From his interview with Times, it seems that Osborne has commited a far serious misjudgement. In mature democracies, sensible politicians never take the peoples' vote for granted. Osborne is suggesting that Brown is conducting a "scorched earth" policy because Labour cannot win the next election but the Tories will. This is an insult to the British public.

    Oh please, is anybody there at Central Office-please get rid of this goon before he becomes a bigger embarassment to his party and this country.

  • Comment number 83.

    Every time Brown opens his mouth to say that we are in 'Unprecedented Crisis' he makes the situation worse. Maybe he should stop doing that before critiquing the words of others.

  • Comment number 84.

    Osborne has a point, and he may well be right. However given the Tories love of free markets is a lot stronger than Labour I fail to see how it would have been any different if they had been in power? Indeed they favoured even less regulation of the banking sector than Labour so the situation may have been far worse.

  • Comment number 85.

    Blimey Nick, it seems that just parroting what Labour tells you is a bit transparent for most on here.

    Why not do a report on the frequency with which Gordon responds to ANY criticism as "playing politics"? Or don't you ever worry that you just might be a pawn in a somewhat Orwellian game of thought control?

  • Comment number 86.

    The UK's economy is built on growth from a FRB system. The whole trickle down effect to matchstick seller depends entirely on the financial elite asking for a light.

    They have all stopped smoking.

    So, the UK is in a very tenuous situation. How does the UK's peers fair? We a technically bankrupt. Like Iceland, the only thing that prevents us having to go cap in hand to the IMF is our 53% secured debt within consumer borrowing.

    The housing assets have been protecting our credit rating, but as they deteriorate further the pressure on Stirling is relentless.

    Joining the Euro and fixing the exchange rate is seen as a better option than returning to the IMF.

    The Tories, like anyone else who can see the cogs turning before the mouth moves know that the Euro option is likely and could happen before they could be elected. The situation so dire it could be rushed through before without consultation.

    Hence Osbournes statement.

  • Comment number 87.

    The moment the shadow chancellor uttered his remarks, the follow-through was automatic. The BBC criticised Osborne, as though shooting the messenger would revive the pound's fortunes. As lots of other comments have pointed out, the pound is falling regardless of what the opposition says. You can't 'talk down' a health economy or a sound pound. We've got neither and it's the opposition's job to speak its mind. Osborne's a patriot for telling the truth. Brown is a pathetic scoundrel for suggesting that he is a traitor to the nation's interests.

    Voters are mightily cheesed off with the institutional bias of the media. Who cares about some arcane etiquette that says that politicians shouldn't discuss the value of our currency?

    The next big news will be a tax bribe from Brown, the real Chancellor. It will be irresponsible and, what's worse, ineffective. But the moment the opposition points this out, they'll be slated for telling the truth. Brown's stranglehold on the media is appalling. 'Mugabe' Brown. If he loses the next election, will he barricade himself inside Number Ten and refuse to leave?

  • Comment number 88.

    The Pound today is worth 1.12 Euro on the tourist rate. Why should anybody lend money to this country if out currency becomes worthless.

    As we have little in the way of manufacturing, our main export for the last few years has been finance, based on our financial skills and the Pound.

    Hold on, the Pound is now worth less, so who is going to "import" our currency and our marvelous financial skills, as Mr Brown believes. No one I know.

    We are starting, as a country, to look quite broke and remember it is usually those who are broke that the banks refuse to lend to. So why would anyone bail this country out. Well, if you are a loanshark maybe, just look at the price Barclays have "paid" for their "freedom". Oh joy, isn't the next year going to be fun.

  • Comment number 89.

    @30 Retro Gamer

    You are right. In G20 meeting, no one has taken much notice of Gordon Brown.

    The link can be easily found in Washinton's Post.

    Despite the efforts of Nick Robinson, Guardian and Independent reporters and the Labour Party who were workin hard to build Gordon Brown as the Saviour of the World, as an awesome economic wizard (Krugman as Nick reports) and a serious experienced man and no novice, alas the G20 ignored him. He was
    reduced to talking with Nick and uardian reporters but one of my American friends, who is a reporter says America is not interested in 'yesterday' man like Brown.
    Hence Brown shakes hands with Hank Paulson and Bush 'yesterday men' like him.

    This reminds me of another Brown visit when Pope Benedict was in America. No one took notice of Brown, the morning show channels gave him a very brief exposure and he was walking in Pennsylvania Avenue forlorn like a shipwrecked man.

    But arch egoist and deluded brown will come and boast that G20 followed his advice and BBC will say that he was mobbed in America for his words of economic wisdom!!

    Osborne is stating the obvious. The Pound has become monopoly money in Brown's Britain. So much about this Iron Chancellor's economic policies. Wait until, our energy costs go up, manufacturing not benefit as it will go to China or India, engineers who are mostly immigrants as our universities shut engineering courses
    will leave with fallin Pound. Brown will never admit mistakes as Stalin did not. Charles Clarke is vindicated.

  • Comment number 90.

    @30 Retro Gamer

    You are right. In G20 meeting, no one has taken much notice of Gordon Brown.

    Despite the efforts of Nick Robinson, Guardian and Independent reporters and the Labour Party who were workin hard to build Gordon Brown as the Saviour of the World, as an awesome economic wizard (Krugman as Nick reports) and a serious experienced man and no novice, alas the G20 ignored him. He was
    reduced to talking with Nick and uardian reporters but one of my American friends, who is a reporter says America is not interested in 'yesterday' man like Brown.
    Hence Brown shakes hands with Hank Paulson and Bush 'yesterday men' like him.

    This reminds me of another Brown visit when Pope Benedict was in America. No one took notice of Brown, the morning show channels gave him a very brief exposure and he was walking in Pennsylvania Avenue forlorn like a shipwrecked man.

    But arch egoist and deluded brown will come and boast that G20 followed his advice and BBC will say that he was mobbed in America for his words of economic wisdom!!

    Osborne is stating the obvious. The Pound has become monopoly money in Brown's Britain. So much about this Iron Chancellor's economic policies. Wait until, our energy costs go up, manufacturing not benefit as it will go to China or India, engineers who are mostly immigrants as our universities shut engineering courses
    will leave with fallin Pound. Brown will never admit mistakes as Stalin did not. Charles Clarke is vindicated.

  • Comment number 91.

    I don't know if saying there'll be a crash (or run) is a wise move - slightly alarmist

    But little george does seem to have it spot on - we are in no position to borrow more and Brown is simply too cowardly to accept that - 'more borrowing to fix borrowing' does not sound very clever to me, remember Brown said we were the 'best placed' to deal with the crisis a few weeks ago, now we're the worst in the G7? How does he get away with it?

    At least Osbourne seems to be making the right noises, but I'm still not going to trust such a young know-nothing as chancellor simply because he's spotted the obvious and he's probably gone a bit too far with a reckless statement

  • Comment number 92.

    You are right. In G20 meeting, no one has taken much notice of Gordon Brown.

    Despite the efforts of Nick Robinson, Guardian and Independent reporters and the Labour Party who were workin hard to build Gordon Brown as the Saviour of the World, as an awesome economic wizard (Krugman as Nick reports) and a serious experienced man and no novice, alas the G20 ignored him. He was
    reduced to talking with Nick and uardian reporters but one of my American friends, who is a reporter says America is not interested in 'yesterday' man like Brown.
    Hence Brown shakes hands with Hank Paulson and Bush 'yesterday men' like him.

    This reminds me of another Brown visit when Pope Benedict was in America. No one took notice of Brown, the morning show channels gave him a very brief exposure and he was walking in Pennsylvania Avenue forlorn like a shipwrecked man.

    But arch egoist and deluded brown will come and boast that G20 followed his advice and BBC will say that he was mobbed in America for his words of economic wisdom!!

    Osborne is stating the obvious. The Pound has become monopoly money in Brown's Britain. So much about this Iron Chancellor's economic policies. Wait until, our energy costs go up, manufacturing not benefit as it will go to China or India, engineers who are mostly immigrants as our universities shut engineering courses
    will leave with fallin Pound. Brown will never admit mistakes as Stalin did not. Charles Clarke is vindicated

  • Comment number 93.

    I love how this article is biased according to the comments - against both sides!!

    some people would call that 'balance'...

  • Comment number 94.

    Isn't then George Osbourne making the case for the UK to be in the Euro. Too late to do anything about it now for a few years, but every reason for us being in it is now coming around.

  • Comment number 95.

    What George and Nick Robinson might think is prudent, is in effect thoroughly subversive of the jittery economy and it completely mis-reads the situation to say that a serving Prime Minister is saving his own neck. He is saving Yours, and everyone else's!

    Gordon Brown is not so arrogant as Margaret Thatcher in her insistence there is no other way. But he does Know what undermines confidence in Britain, and George Osbourne is not so bright if he thinks he can play politics with everybody's futures for his own kudos and advantage by doing just that! Back-seat driving is one thing. Throwing spanner after spanner into the works is Another.

  • Comment number 96.

    Dear Dear me
    Sterling has fallen 30/40% before George Osbourne opened his mouth.
    The only irresponsible people involved are you Nick and the BBC
    Wake up, smell the coffee and tell it how it is.
    Sorry forgot.
    You are the BBC and just do propaganda

  • Comment number 97.

    More evidence, as many Torries fear, that George Osborne is an idiot.

  • Comment number 98.

    I would believe political commentators more if they had poibnted out the fall of sterling over the past 3 months. 25% against the US dollar.
    A 10% fall againstt the Euro in the past 3 weeks.

    The fact that they do not shows how clueless they are and how dependent on political spin from the Government - as evidenced by this affair.

    And how absolutely useless most political journalists are: they cannot be bothered to do basic research before writing an article.
    After all, if Osborne is talking about a sterling meltdown, step 1 is to look and see what is actually happening.

    As Nick Robinsion and the BBC initially today in its news nraodcasts have obviously done no research, their comments there can only be one conclusion:

    their comments are as valuable.. as their research. i.e worth nothing...

  • Comment number 99.

    I congratulate you on a great piece of journalism. I did not spot an iota of bias this time.

    Has anybody else noticed how Brown is now claiming that any criticism of him is a criticism of this country? He keeps on saying that now is not the time for partisan politics. Please God bring an election soon so that we can be rid of him and his government. I don't care if it is a Tory or a Lib Dem government, just somebody else asap.

  • Comment number 100.

    We need a tradtitional thatherite response...........................SOUND MONEY!

    That means living within our means..............................


    If Crash Gordon hasn't got the guts to get the Gov't to tighten it's belt like that rest of us then it would be better to tax the rich MORE temporarily rather than risk the currency!

    Do we really need a currency crisis right now?

    All this talk about Keynesism is deadly! Bring back monetarism and Friedman/Thatherite solution...............increase the money supply!!!!!!!!!!!! How? By getting "real" interest rates down to put money in peoples pockets.

    We've got another 3% to cut and nothing should be done, like over borrowing that would result in the pound declining any further resulting in Icelandic levels of interest rates.........18%!!!!!!!!!!!!!!

    This is Brown's last spin of the dice.................borrow and spend to create a feel-good factor with the political "cover" of an International agreement from Washington.................Let's hope those leaders see right through his cunning and dish his hopes............

    None of this would be needed if the Gov't like like the Austrailians had followed a tax and spend policy resulting in a "surplus".

    Now Brown is prepared to gamble the future of the country and his political skin on one last desparate throw of the dice knowing that this gigantic gamble will have to be paid for after the next general election in cash and millions of job losses before the election.

    Somebody has to stop him. Let's hope that the market on Monday sending a spine shivering shock to the heart of 10 Downing Street to stop this spending slurge and if that happens George Osbourne will have done a marvellous job.

    Perhaps then, the "age of responsibility" will return!


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